In June of 2013, we learned that Berkshire Hathaway Specialty Insurance (BHSI) had officially started its efforts in America. Launched by none other than oft-praised insurance executive Ajit Jain, BHSI is the commercial property casualty insurance group that focuses on excess and surplus lines insurance, which allows companies to design specific policies and coverage depending on the needs of their businesses. [...] Earlier this year, we learned Berkshire Hathaway, in total, saw its total excess and surplus insurance premiums written -- which includes a few of its other businesses -- jump by $150 million, or nearly 40% in 2013, to stand at $561 million. The overall industry only saw premiums increase by 7.6%, and industry leader AIG saw its premiums actually fall by 4.2%, to $4.8 billion.
Berkshire Gets $3 Billion in Liberty Mutual Risk Transfer (Bloomberg Businessweek)
Warren Buffett’s Berkshire Hathaway Inc. agreed to backstop as much as $6.5 billion of Liberty Mutual Holding Co.’s obligations tied to asbestos, environmental and workers’ compensation policies. Liberty Mutual said in a statement today that it paid Omaha, Nebraska-based Berkshire’s National Indemnity Co. about $3 billion for the coverage. Berkshire has assumed billions of dollars in asbestos risk from insurers including CNA Financial Corp. and American International Group Inc. over the last decade. The contracts are a bet that Buffett’s company can generate profit by investing policy reserves and managing claims that will stretch out for years.
Warren Buffett Shares The Inside Scoop: He Bought A Cadillac (Forbes)
“The truth is, I only drive about 3,500 miles a year so I will buy a new car very infrequently.” In fact, his 2006 Cadillac DTS which had just 19,000 miles on it, was barely broken in when he became convinced recently it was time to replace it. [...] The sales pitch came from none other than GM Chief Executive Mary Barra, who had flown to Omaha in mid-May to meet one of GM’s largest shareholders amid a growing safety crisis that threatened to stall the automaker’s comeback. The meeting came around the same time Buffett’s holding company, Berkshire Hathaway, disclosed that it had cut its stake in GM by 25 percent, to 30 million shares, during the first quarter.
Buffett-owned office tower construction firm opening Phoenix facility (Biz Journals)
This is the first Berkshire company that you may not have heard of before to make this week's update.
A Warren Buffett-owned company that constructs glass and steel façades for high-rises and skyscrapers is opening a manufacturing and assembly facility in west Phoenix. Portland-based Benson Industries LLC has leased nearly 93,500 square feet at the Durango Commerce Center near 75th Avenue and Interstate 10. Benson is a subsidiary of MiTek Inc., which is owned by Buffett’s Berkshire Hathaway. Benson manufactures glass and steel structures outfitted on the outside of large buildings including One World Trade Center and the New York Times Building in New York, as well as towers in Los Angeles, Las Vegas, Singapore and Hong Kong. The company has an assembly plant in Tijuana.
Berkshire Hathaway continues massive growth (Stevens Point Journal)
Berkshire Hathaway Travel Protection leaders said Wednesday that the company already has hired 150 full- and part-time employees this year and intends to grow to about 2,000 workers over the next five years, most of them in central Wisconsin. The company formerly known as the Noel Group now employs about 230 people in Wisconsin and Florida offices. [...] On Wednesday, Gov. Scott Walker was in Stevens Point to tour its growing operations and praise the company's growth. In January, Berkshire Hathaway Specialty Insurance, a division of Warren Buffett's Berkshire Hathaway conglomerate, bought the assets of the Noel Group's two key companies, MyAssist and Insure America. In May, the Noel Group became Berkshire Hathaway Travel Protection; since then, the company has ramped up its hiring.
AltaLink president confident of approval of sale to U.S. firm
As the planned sale of Alberta’s largest electrical transmission company to an American firm comes under scrutiny from politicians and the public, the president of AltaLink remains confident the deal will win approval from provincial and federal reviews. The $3.2-billion sale of AltaLink by Quebec-based SNC Lavalin to Berkshire Hathaway Energy — owned by billionaire Warren Buffett — is attracting attention, from the hiring of lobbyists to full-page newspaper ads from ATCO warning about “serious consequences” if the deal goes ahead.WSJ: Retail Investments Represent Blemish on Buffett's Record (MoneyNews)
Warren Buffett, CEO of Berkshire Hathaway, has succeeded with his investments in almost every sector he's entered. But retail constitutes an exception. Buffett has called his performance in that area "awful," "pretty bad" and "really bad," The Wall Street Journal reports. [subscription required] [...] It's not significant, given that Berkshire's nine retail businesses make up only 2 percent of its $182 billion in revenue, according to the paper's calculations. Those businesses include See's Candies, Ben Bridge Jeweler and Nebraska Furniture Mart.
Warren Buffett: Why Being Cheap With Money Is a Big Mistake (Fool)
"Long ago, Ben Graham taught me that "Price is what you pay; value is what you get." Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."
Let's say you see a pair of socks at the dollar store versus some at the neighborhood sports store. The sports store has a $25 three pack on sale for $15, while you could buy three pairs for $3 at the business next door. Knowing one "investment" is five times more expensive, Buffett would tell you to pay $3 for the socks, right? Wrong. You'd have to consider so much about the socks beyond just the price. For example, what if the cheaper socks carried significant risk of injuries like blisters? Or what if they wore out after just a few months of use? And so on. The $15 socks could in fact provide better value. If the $3 socks must be replaced every eight months -- their "quality" may be anything but -- and you could hold onto the $15 socks for five years, you'd end up paying more over the long term for being cheap.
Details of crude-oil shipments in Nebraska remain mostly a mystery (Omaha World-Herald)
Both Union Pacific Railroad and BNSF Railway move crude oil in Nebraska by rail, though neither they nor state officials will say exactly when, where or how much. [...] The topic has entered the public realm in recent years as oil shipments via train have skyrocketed amid production for newly tapped reserves in North Dakota, Montana and Canada’s Saskatchewan province. According to the Association of American Railroads, major freight rail companies originated 9,500 carloads of crude oil in 2008. In 2013, they originated 407,761 carloads. While the industry says the accident rate for transporting the combustible liquid is low, the accidents that have happened have been lethal or potentially so, amping up public interest, safety concerns and demands for details on the shipments.
The Best Business Book I’ve Ever Read (LinkedIn, by Bill Gates)
Not long after I first met Warren Buffett back in 1991, I asked him to recommend his favorite book about business. He didn’t miss a beat: “It’s Business Adventures, by John Brooks,” he said. “I’ll send you my copy.” I was intrigued: I had never heard of Business Adventures or John Brooks. Today, more than two decades after Warren lent it to me—and more than four decades after it was first published—Business Adventures remains the best business book I’ve ever read. John Brooks is still my favorite business writer. (And Warren, if you’re reading this, I still have your copy.)
Billionaire Warren Buffett Donates $2.1 Billion to Gates Foundation (Techsonia)
Second-richest person in the U.S. Warren Buffett donates on Monday $2.1 billion to the Bill and Melinda Gates Foundation, which is his biggest ever given to charitable institutions. This year’s Buffet gift to Gates Foundation is higher from the $2.0 billion last year and it is also more than any of his previous eight donations. Buffett has given about 21.73 million Class “B” shares of Berkshire Hathaway Inc. and around 16.6 million of that, which is worth over $2.1 billion, went to the Gates Foundation. The remainder went to four charities run by Buffet’s family members, including a foundation named for his late first wife Susan and foundations for his children Howard, Peter and Susan.
Jordan’s Furniture collects clothes, shoes for kids (Furniture Today)
This is the second company in this week's update that you may not be familiar with.
Jordan’s Furniture has started collecting new and like-new clothes and shoes for children at its stores and distribution center here, benefiting the Cradles to Crayons Ready for School program. The retailer, part of Berkshire Hathaway’s furniture division, is partnering for the third year with the organization and with social service agencies that help distribute the donations to children in homeless or low-income situations.
Paul McCartney, Warren Buffett spotted in Dundee (Omaha World-Herald)
Paul McCartney was spotted with Omaha billionaire Warren Buffett in Dundee on Sunday night having dinner, dessert and a walk around the neighborhood. [...] After dinner, the group went up the street to eCreamery.
And finally... this has nothing to do with Berkshire Hathaway, but everything to do with this blog. Apparently, I'm nothing more than a 19th century scrapbooker.
When Copy and Paste Reigned in the Age of Scrapbooking (Smithsonian)
Cutting, pasting, collating: This feels like a new behavior, a desperate attempt to cope with a radical case of information overload. But it’s actually a quite venerable urge. Indeed, back in the 19th century we had a similarly intense media barrage, and we used a very similar technology to handle it: the scrapbook.
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